What Does Contractor Pollution Liability Insurance Cover?

Your construction insurance coverage is there to protect you from the unexpected incidents that could happen on (and off) the project site. Injuries, property damage, auto accidents, theft of your tools and equipment, and even damage to the project itself. But there may be a hole in your current coverage that is leaving you exposed to a major risk:

The risk of a pollution incident.

Environmental pollutants are a big concern for general and trades contractors.

And you don’t have to work with fuel, oil, or hazardous chemicals to run the risk of exposing yourself to a pollution incident.

General and trade contractors not only have to worry about the liability and damages for substances they bring onto a site, such as paints, sealants, lubricant oils, and asphaltic cement, but also the potential for hidden contaminants which may already be present on a project site.

You may be surprised how often you run the risk of releasing contaminants, aka pollutants, into the environment as a result of your work.

Incomplete or improper HVAC system construction could result in mold and fungus being released into the air of a residential or commercial building.

A remodeling job could disturb asbestos-containing materials.

Sandblasting a bridge could release dust-sized particles of lead paint into the air.

Site excavation could disturb contaminated soil.

Vandalism of a project site could result in a fuel, oil, or chemical spill.

What you Didn’t Know about You GL Coverage

Your general liability coverage is there to protect you from claims for bodily injury or property damage as a result of your work. Unfortunately, most GL policies contain some exclusions that prevent the policy from covering every possible incident.

And one of the most notable exclusions in a GL policy is the “total pollution exclusion” clause that can leave you holding a costly bill if a pollution incident occurs.

Understanding Your Pollution Coverage

Pollution insurance policies can differ, so be sure you understand the following two key components of your coverage:

1. What is a pollutant?

Your coverage may provide a broad definition of what is considered a pollutant, or it may be more narrow. Generally speaking, a pollutant is often defined as:

“An irritant or contaminant, whether in solid, liquid, or gaseous form, including -- when they can be regarded as an irritant or contaminant -- smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste.”

Talk with your construction insurance professional to be sure your coverage is broad enough to cover all pollution risks, or at least covers the specific risks you may face in your trade.

2. Gradual vs Sudden Pollution Release

A pollution policy that covers both gradual and sudden pollutant releases will give you the broadest protection against accidents and mishaps. If your policy only covers a sudden, accidental pollution incident, you could be left at risk for pollution events that aren’t discovered until months (or even years) down the road.

The best way to protect your business from the high costs of a pollution event is to be sure your policy covers both gradual and sudden events and has a broad definition of what is considered a pollutant.

Fumes from sealants, floor coatings, and finishes; disturbing lead paint, asbestos-containing materials, or naturally occurring asbestos; excavating contaminated soil; leaking storage tanks… you run the risk of a pollution event happening on a daily basis.

Pollution incidents could quickly add up. Property damage, bodily injury, and clean-up costs are just the start. You could also be facing some major reputational damage as a result of one small accident, too.

Only pollution liability insurance will offer you the peace of mind and broad protection against the risk that you unearth, disturb, or release a pollutant while doing your job.